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Thursday, July 08, 2010

Day 80 BP Oil Spill Update: Closing In On More Recovery & Well Killing

Jul 7: National Incident Commander Admiral Thad Allen reported at a press briefing from the Discoverer Enterprise, the ship that's collecting oil from the well, that he and other officials had traveled out to the rigs to get an assessment of the on-scene conditions in the wake of the passage of Tropical Storm Hurricane Alex and to get a sense of "how we're doing with the -- the Helix Producer, which is the third platform to be hooked up to the current containment system" which is expected to increase recovery to approximately 53,000 barrels per day.

Allen said the Helix Producer partially connected to a canister that sits below what they call the moon pool in the Helix Producer. They've connected their production lines from the top down to the canister. What remains to be done is to hook the flexible hose from the freestanding riser pipe to the bottom of that canister, and then the procedures required to test it and be ready to go to production will take approximately three days. He said this was originally scheduled to have been done on June 30, but was delayed due to the weather from Hurricane Alex and yet another front that's coming through. He said it is hoped that within the next 48 hours that the sea state will die down and allow that hook-up to take place. He said sea swells were about four to six feet but were expected to die down over the next couple of days.

Allen also reported on the Development Driller III, which is just a few thousand yards away from their position on the Discoverer Enterprise, is within the last several hundred of feet of closing in on the wellbore prior to penetration. He said, "They're at a point right now where they're going in 10 to 15-foot sections at a time to drill and then sense with electrical device the electromagnetic field around the wellbore as they slowly close in on it. This is a very precision, complicated operation. They're doing it very slowly to make sure they get the exact alignment they need before penetrating the wellbore." In a separate report from BP, the company said it is ahead of schedule and may close on the wellbore by July 27. In a Wall Street Journal interview, the head of BP's Gulf Coast restoration unit Bob Dudley said, "In a perfect world with no interruptions, it is possible to be ready to stop the well between July 20 and July 27."

In its latest report on recovery operations, BP indicated that for the last 12 hours on July 7 (noon to midnight), approximately 8,325 barrels of oil were collected and approximately 3,995 barrels of oil and 28.8 million cubic feet of natural gas were flared. On July 7, total oil recovered was approx. 24,575 barrels (16,655 barrels of oil were collected; 7,920 barrels of oil were flared; and 57.6 million cubic feet of natural gas were flared). The total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 684,700 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 706,700 barrels.

Interestingly, BP stock is now climbing slightly from around $27 a few days ago to nearly $34 per share -- down from over $60 before the spill. The company's market value has also risen from a low of $98 billion a week ago or so, to $104 billion currently. The market value before the oil spill disaster was about $180 billion. Financial news reports are indicating that there are discussions within the industry that a BP takeover is possible. The HearldScotland reported on July 8 that, "Tony Hayward, the BP chief executive, yesterday arrived in Abu Dhabi for a scheduled visit with a trading partner and to meet potential investors in a move widely regarded as an effort to ward off any takeover attempts. . . Reportedly, a United Arab Emirates source said that BP executives were holding talks with a number of sovereign wealth funds including Abu Dhabi, Kuwait, Qatar and Singapore."